In the United States there were about 500 million credit cards in circulation in 1974, and an additional 200 million were issued that year on new accounts or to cover maintenance (renewal). These numbers do not include the emerging debit card field (for bank or S and L account access), nor the ID and security card fields.
Such cards (called herein "credit cards" for simplicity) being equivalent to or providing access to money, property or credit, must be handled with accuracy under stringent security during issue of the cards, i.e., manufacturing, preparing for distribution, and actual distribution (e.g., by mailing) to the cardholder-customer. The correct number of cards must be correctly embossed and/or encoded with the cardholder's account number and other data. The embossed cards must be protected from theft until they are in the hands of the cardholders.
The preparation for distribution of the cards must likewise be done accurately under stringent security precautions. The cards are normally placed in what is called a carrier and mailed (first-class, registered or certified mail) to the cardholders. Advance notice and/or follow-up verification mailings may also be used to help insure against theft or notify promptly of non-receipt by the addressee-card user.
It is an extremely serious matter when the wrong cardholder receives the wrong card or wrong number of cards. If a cardholder is supposed to get two or three cards and receives only one, or if a cardholder receives a card of another account, there is a chance for theft of goods by credit cards. The average loss is in the four figure range with highest losses in five figures. The matter is even more serious in the case of debit cards. Such cards give access to a person's checking and/or savings account. Cards going to the wrong person creates a theft potential. This highlights the need for carrier forms and machine methods of accurate inserting and preparation for distribution.
Most cards are inserted manually in the two-slit, no-slit or pocket carriers. There are two basic approaches. In one, the person inserting the card has a stack of precut, single-sheet carriers having no account information thereon, and a stack of presequenced cards. They also have a stack of separate sheets of thin paper which are presequenced mailers with address and account information. The inserter compares the account number on the card to that on the separate mailer. The cards are inserted by hand into the slits or pockets of the carrier, assembled with the mailer, and then placed in envelopes. The second approach involves having account information typed onto the individual carriers which are presequenced and assembled with presequenced cards. A top-rated inserter is capable of inserting 1,500 accounts in an 8-hour day with an average of 1.7 cards per account. The average acceptable rate is generally, 1,000 accounts per day, and low is 750/day.
Correct presequencing of the cards and carriers or inserts is critical to any reasonable rate of manual insertion and to reducing the frequency of mismatch errors. Further, such manual insertion rates require many workers in order to keep up with the rate of production of credit or debit cards. For example, automated embossing machines have a current card embossing rate ranging from 350 to 1,500 cards/hour. The rates are the same for encoding cards bearing magnetic stripes.
We believe there is a machine available that can insert a card in a four-slit carrier by flexing the card along both its major and minor axis so the four corners can be popped into four respective corner slits. Another machine is capable of putting a dab of glue on the carrier and depositing the card thereon. However, neither machine matches the cards and carriers, so mis-match errors will occur unless exact sequencing is maintained. In automated equipment of this non-verifying type, once a sequence error occurs, all subsequent insertions will continue to be mis-matched.
There is thus a need for an improved high speed automated credit card insertion apparatus that has a verification function, i.e., that can "read" both the credit cards and carriers therefor that contain special photo-optically readable machine instruction information, cardholder identifying information, or issuer information, and compare the data to ensure there is a match of the correct number of cards for the proper carrier, and which machine is programmed to insert the cards in the carrier when the data matches.